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How You May be Affected

CHANGES TO CONTRIBUTION AMOUNTS:

Already retired?

• There is no change to the percentage university contribution for those who retired before the year 2000.
• Beginning on Jan. 1, 2013, those who retired after the start of the year 2000 will receive a university contribution of 90% of the premium (currently 93%) for the retiree and 70% for any covered dependents.

Planning to retire between now and the end of 2012?

• There will be no change until Jan. 1, 2013, when you will receive a university contribution of 90% of the premium (currently 93%) for the retiree and 70% for any covered dependents. (This change will also apply to current retirees who retired during or after the year 2000.)

Retiring on or after Jan. 1, 2013?

• The university will begin reducing its percentage contribution toward premiums by 2.5% for the coverage of the U-M retiree and by 5% for dependents every two years. The percentage university contribution received throughout retirement will be set by the year in which retirement occurs (e.g., retire in 2013 or 2014 and receive 87.5% toward retiree coverage and 65% toward dependents; retire in 2015 or 2016 and receive 85% toward retiree coverage and 60% toward dependents; retire in 2017 or 2018 and receive 82.5% toward retiree coverage and 55% toward dependents, etc.)
• This gradual reduction will continue until the university’s contribution level reaches 80% for the retiree and 50% toward the premium cost for dependents. The leveling out will occur at the close of 2018.

Retiring in 2019 or later?

• Faculty and staff who retire on or after Jan. 1, 2019 will receive the university contribution toward health care premiums of 80% for the retiree and 50% toward coverage of dependents.


CHANGES TO ELIGIBILITY REQUIREMENTS:

Points required to retire with benefits: Starting on Jan. 1, 2013, the sum of age and years of service must equal 76. Beginning in 2015, one point will be added to the requirement every two years through 2021, when we will complete the transition to an 80-point eligibility requirement.

Newly hired employees: Faculty and staff hired on or after Jan. 1, 2013 will be eligible to retire with benefits once the required points are accumulated. The university contribution in retirement will be 68% of their health care premiums and 26% for any covered dependents.

Years of service: For employees retiring on or after Jan. 1, 2021, the university will implement changes to its contribution toward retiree health benefits on a sliding scale based on years of service. Fifty percent of the full university contribution will be provided for those who retire with 10 years of service, and the contribution will increase (10% for every additional two years of service) to 100% of the university contribution for those who retire with 20 or more years of service.

CHANGE TO ACCRUAL RATE FOR PART-TIME EMPLOYEES:

Beginning on Jan. 1, 2013, benefits-eligible part-time employees (appointments of 50% - 79.9%) will accrue 0.8 years of credit toward retirement eligibility per full year worked. This accrual rate more accurately aligns the credit toward retirement with the percentage of effort.

(Employees with appointments of 80% or greater will receive the same credit toward retirement as full-time employees.)

 

Use the Retirement Health Benefit Estimator to see your earliest date of retirement eligiblity using the new criteria.